How to Handle the Trade-Offs That Test Your Integrity

Episode #370 How to Handle the Trade-Offs That Test Your Integrity

WHAT YOU SAY IS IRRELEVANT

I can’t believe that I’m 370 episodes into the No Bullsh!t Leadership podcast, and I’ve never tackled this issue head on. What are the implications of the disconnect between a leader’s values and their day-to-day behaviour?

You can stick your values in a glossy brochure or an annual report… you can talk about them in your town hall meetings… and you can make them part of the onboarding process…  but your people don’t care what you say your values are. They only care what you do when the chips are down.

Do you still have integrity even when it might cost you money? Do you mandate respect for others even though it might risk losing a top performer? Do you offer your opinion freely and honestly even when it could damage your standing with the boss?

That’s when the real test comes, because, make no mistake, your people are watching you. They see the difference between what you say and what you do, and any inconsistencies are going to reverberate throughout your culture.

What I’ve learned over the years is this: there’s a big difference between the values you hold dear, and use to guide your behaviour, as opposed to the values that you expect someone else to live by. You need to know the difference and lead accordingly.

I begin by looking at why values aren’t always black and white… I explore three common root causes that entice leaders to deviate from their stated values… and I finish with my three-part test to help you stay true to your values.

YOUR VALUES WILL BE TESTED FREQUENTLY

I got the idea for this episode from an article in Harvard Business Review, which was titled To Change Company Culture, Focus on Systems—Not Communication. I was browsing this article somewhat mindlessly when a subheading caught my attention: Values don’t count until they cost you something.

Wow!

The article spoke to the fact that culture will be determined, to a large extent, by the values that the company focuses on. But talk is cheap and people are always watching to see what signals their leaders send, based on their actions.

They want to know what you find acceptable, so that they can work out how much latitude they have in their own behaviours.

I don’t do this very often, but I think it’s worth quoting two paragraphs from this article in their entirety:

“Executives often champion values like empathy, inclusion, and integrity. They appear in slide decks, onboarding sessions, and CEO town halls. But employees rarely judge values by how often they’re named. They judge them by what leaders are willing to give up to uphold them.

The strongest cultural signals are those that involve visible, personal risk. That might mean changing how incentives work. It might mean enforcing values even when it means losing a top performer. It might mean sharing decision-making power that used to sit solely at the top without that cost, values remain performative. They read as theatre, not truth.”

This resonated with me deeply because the word “performative” perfectly sums up how some leaders exercise their values.

Just go and randomly select a bunch of podcast interviews with leaders who are describing their leadership journey. I will guarantee you that 95% are going to talk about how important their values are… and almost all of these will specify integrity as their number one value.

But for many of these leaders, the minute they have to choose between acting with integrity and facing the personal risk or cost that this would involve, their integrity is conveniently swept aside: not because they’re bad people; it’s just that you don’t really find out what’s important to someone until the pressure’s on.

IT’S NEVER BLACK AND WHITE

In my world, values are everything, particularly because (as you may have heard me say) values are a behavioural choice that every individual makes. And, despite the popular swing to victimhood over the last decade or so, we all have control over how we behave.

But I think it’s important to draw a distinction here: there’s a difference between the standard you need to hold yourself to in support of your values, and the standard you expect from those around you based on those values.

Let’s face it, not everyone’s going to hold the same values as you.

My time at CS Energy provided me with many graphic examples of this. A little while after I took over as CEO, I decided the values needed to change. My key question was, What does the company need to do, and how do the people need to behave in order to dig the business out of the hole it’s in?

So, I replaced the values with these four and had them approved by the board:

1. Be safe
2. Create value
3. Take accountability
4. Act with integrity

To say that these four values were aspirational would be a massive understatement. They didn’t really describe, in any way, shape or form, what the culture was actually like at the time we rolled them out.

Consequently, we couldn’t be too black and white about how these values were applied to the people who worked there, knowing that in some cases, their actions demonstrated the polar opposite.

It’s always a matter of degree, and you’ve got to read the play – you can’t die in a ditch over every little thing, otherwise you wouldn’t last two weeks in most leadership roles.

When I speak about leadership principles, I speak quite categorically. I talk in very black and white terms because, hey, I’m making a point, right!?

I give you the extremes of each end, and I can be really demonstrative about what you need to do (or not do). But in reality, it’s never that black and white. The higher up you go, you just get to deal with a thousand annoying shades of grey. (We produced a podcast episode on this a little while ago, which talks about some of these nuances in more detail.

When I say something like, “Don’t dip down!”, it sounds like one of the 10 Commandments, right!? But in reality, it doesn’t mean that you should never dip down or that there’s never a circumstance in which dipping down is necessary.

I just want the principle, don’t dip down, to be in the forefront of your mind so that when you are faced with the choice to do it or to not do it, you can make some sort of judicious decision. Most importantly, you need to understand the cost and the trade-offs that you make when you dip down into your people’s work.

INTRODUCING NEW VALUES INTO AN EXISTING CULTURE

Let me give you a quick example of how I tried to shift the values in CS Energy, to a set of beliefs and behaviours that would make a difference to the culture, and to the performance of the business.

As I mentioned, I set the values of Be safe; Create value; Take accountability and Act with integrity.

But when I first arrived, the culture I found there may well have been described using these four values instead:

1. Safety in numbers
2. Maintain resistance
3. Deny ownership
4. Milk your entitlements

I am massively against the soft theft that goes on in companies. It might feel like a victimless crime, but it’s a great barometer for where you stand on the value of integrity.

For example, claiming overtime that you shouldn’t have earned. This happens when a workforce has a cultural bias for gaming the system, and management has decided the easiest thing to do is just to turn a blind eye.

Take the practice where one team member would call in sick so that another team member would have to be called in on their rostered day off. The replacement person gets paid double time for that whole shift.

And the next day, guess what? It’s someone else’s turn to do the same thing.

This happened routinely in some of the pockets of our operational sites. My instinct was just to sack anyone who was caught doing it because the practice was completely antithetical to my own sense of integrity.

But then I realised this conduct hadn’t just sprung up out of nowhere. Successive management teams, probably over the course of decades had allowed the practice to continue. It had been completely normalised in the culture of those teams.

It was now seen as an entitlement, and when we suggested that it might not be the way we want to do things, we got ferocious pushback from the unions. Their first gambit was to deny that it was happening… apparently, we were just imagining it.

Then they said we had no right to change things. It was a valid part of the enterprise agreement.

This sense of entitlement was breathtaking. But as much as it irked me, we knew that we were going to have to change it gradually, from the inside out.

I had to suck up my own personal sense of integrity and take a slower, softer approach than I would’ve otherwise liked. Let’s face it, it’d be pretty hard to run a power station if 50% of the workforce was dismissed in the same week.

ROOT CAUSES THAT DERAIL OUR VALUES

Let’s just get back to the scenario where a leader has to choose how they behave according to their own set of values. There are three main drivers that I’ve seen which cause leaders to deviate from this stated values

The first is money; the second is the fear of conflict; and the third is a potential loss of standing.

Money is a pretty obvious one. Some leaders have really strong values… until it looks like upholding them is going to hit them in their own hip pocket, that is!

I once worked for a CEO who would’ve said with a straight face that integrity was everything to him. But ultimately, hey, he really loved his money.

One year when we were coming to the end of a reporting period, and it looked like we might miss our financial targets, he asked me, “Is there any way we can take some costs out of the P&L? Can we ask our major suppliers to have a billing holiday and resume on the 1st of July?

Integrity clearly wasn’t going to survive the magnetic attraction of the bonus pool.

The second root cause, fear of conflict is a little less obvious, because it’s so easy to rationalise. One example is allowing terrible behaviour from a so-called high performer. You might espouse respect for others as one of your key values, but when it comes to a producer who you know is essential in getting results, it’s a lot harder to step in and hold them to account for their behaviour.

Talented jerks are normally pretty headstrong, and it’s often easier to just let them have their way.

The third root cause is a loss of standing. Truth, honesty, and transparency: to uphold any of these values means that occasionally you’ve got to take some risk. But what happens in a situation where upholding your values means that you’re going to have to disagree with your boss?

Often, it’s easier just to remain silent and not speak your mind.

Over the course of my corporate career, I got into hot water many times by being true to my views, which meant I had to disagree with a boss who was either very headstrong, or dangerously insecure. But it wasn’t going to stop me from doing it, because it was important to me that I contributed my best.

In one case, I remember telling a CEO that I thought his idea about how to manage a looming redundancy program was just dumb. So, yeah, I was true to my values… but my execution left a lot to be desired. I probably created more backwash than I needed to while I was upholding my values of transparency and truth.

THE THREE-STEP PROCESS FOR BEING TRUE TO YOUR VALUES

Okay, so we have a bit of a dilemma. We have to stay as true to our own values as possible, no matter what the consequences may be. This makes a difference as to how we’re seen by the people around us, and it’s either going to strengthen or weaken our ability to build the culture we want.

We know this is going to be hardest when we can see a clear personal toll on the horizon. When you find yourself in this situation, I’m sure you’ll find it incredibly beneficial to deploy my three-step process for holding firm to the values that you believe in:

1. Recognise when you have a conflict.

You need to be able to identify when you have a potential mismatch between your professional values and the action you have to choose – and many leaders don’t even think about it.

They’re driven by the emotion of the moment and, even without knowing it, they simply follow the path of least resistance. So the very first thing is to become more aware of these tension points. Assuming you recognise the conflict, you can move onto the second step.

2. Ask the threshold question.

This question is critical: Are you compromising your values for personal reasons, or for the good of the team and the company?

In some of the examples I gave earlier, the biggest problem was the inability to shift the culture of the business. And sometimes, that means you have to allow some tolerance levels around your closely held values: it becomes a judgment call as to how much rope you give people.

But there’s a big difference between being tolerant of other people’s behaviours, because you know they’re deeply rooted and they’re going to take some time to change… and abandoning your own values because it’s convenient.

If you’re loosening one of your values for the good of the organisation, well, okay: but you’ve got to be honest with yourself about whether that’s genuinely the case. And, if so, you have to be deliberate about it.

If, on the other hand, you’re just quietly departing from one of the values that you say you hold dear because of the personal risk and cost, well, you’ve probably got that wrong.

If this is the case, you should move on to step three.

3. In your head, you have to pay the price up front.

This is an awesome hack. If you can manage to get your head around the fact that staying true to your values is going to have some sort of toll, and that it’s worth paying that price to keep your values intact, then you’re going to find it way easier to make the right decision when it counts.

Just ask yourself, “What’s the worst that can happen?”

If you can live with that, then you’ll be very much at ease when you step into whatever difficult leadership work awaits.

But if you’re not happy to live with those consequences, then maybe you are fooling yourself about what your values really are.

BE KIND TO YOURSELF – BUT NOT TOO KIND!

No one’s perfect, and even when it comes to your most cherished values, it’s almost impossible to be consistent 100% of the time: so you need to be kind to yourself.

Then again, if you routinely depart from your values, even if it’s just through benign neglect, it can have a devastating effect on team culture and performance.

Your people are going to see more clearly than you could possibly imagine, that you can talk the talk, but you can’t walk the walk. And that gives them the licence to treat any values that you decide to espouse with casual disregard.